Important Points for IC 99 - Asset Management Exam
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The solvency margin is analysed by the regulator and other financial analysts concerned by comparing the available solvency margin (ASM) of the company with the required solvency margin (RSM) to be determined as per norms set by the Regulator according to nature and volume of business.
Every general insurer shall prepare a statement of admissible assets in FORM IRDAI-GI-TA in accordance with Schedule I. Every general insurer shall prepare a statement of the amount of liabilities in FORM IRDAI-GI-TR in accordance with Schedule II. Every General insurer shall prepare a statement of solvency margin in FORM IRDAI-GI-SM in accordance with Schedule III.
The following Standard Actuarial Methods may be used for estimation of IBNR reserves : i) Basic Chain Ladder Method (both on incurred and paid claims), ii) Bornhuetter Ferguson Method (both on incurred and paid claims), iii) Frequency - Severity Method.
"Available Solvency Margin (ASM)" shall be calculated as the excess of value of assets (as furnished in Form IRDAI-GI-TA) over the value of liabilities (as furnished in Form IRDAI-GI-TR) with further adjustments as shown in Table IB or FORM IRDAI-GI-SM.
"Solvency Ratio" means the ratio of the amount of Available Solvency Margin to the amount of Required Solvency Margin as specified in Table IB.
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